New Zealand keeps benchmark rate at record low

New Zealand's central bank left its benchmark interest rate at 2.5 per cent on Thursday, citing moderate inflation and uncertainty in Europe.

In a widely expected move, the Reserve Bank of New Zealand decided against shifting the official cash rate (OCR) from the record low setting that has been in place since March last year.

"It remains appropriate for the OCR to be held at 2.5 per cent," central bank governor Alan Bollard said in a statement.

Mr Bollard said the bank expected modest domestic economic growth in the next few years and was closely monitoring developments in Europe, while inflation was expected to settle in the middle of the bank's 1.0 - 3.0 per cent target band.

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